NCAA, Power Five approve bombshell $2.8 billion settlement, setting stage for direct athlete pay

The NCAA and the nation’s five biggest conferences have agreed to pay nearly $2.8 billion to s🥂ettle a host of antitrust claims, a monumental decision that sets the stage for a groundbrea💧king revenue-sharing model that could start directing millions of dollars directly to athletes as soon as the 2025 fall semester.

The deal🤪 still must be a🔥pproved by the federal judge overseeing the case and challenges could arise, but if the agreement stands it will mark the beginning of a new era in college sports where athletes are compensated more like professionals and schools can compete for talent using direct payments.

“There’s no question about it. It’s a huge quantum leap,” said Tom McMillen, the former Maryland basketball player and congressman who led a group of collegiate at𓃲hletic directors the past year years.

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The Pac-12 was the final conference to sign off when university leaders voted Thursday to approve the pl🐎an, according to a person with direct knowledge of the decision.

Southeastern Conference🦩 school leaders🐈 unanimously approved the deal a few hours earlier, a second person with knowledge of that decision said.

Both spoke to The Associated Press on condition of anonymity because an coordinated announcement among the Pac-12, SE𝔍C, Big Ten, Big 12, Atlantic Coast Conference and NCAA was still being prepared.

All met a Thursday dea👍dline set by plaintiffs’ attorneys.

The details in the plan signal the end of the NCAA’s bedrock amateurism model t🍨hat dates to its founding in 1906.

Indeed, the days of NCAA punishments for athletes driving boꦬoster-provided cars started vanishing threꦛe years ago when the organization lifted restrictions on endorsement deals backed by so-called name, image and likeness money.

Now it is not far-fetched 𝓡to look ahead to seasons where a star quarterback or top prospect on a college basketball team are not only cashing in big-money NIL deals but have a $100,000 school payment in the bank to play.

There are a host of details still to be determined, but the ag꧂reement calls for the NCAA and the conferences to pay $2.77 billion over 10 years to more than 14,000 former and current college athletes who say n𝔉ow-defunct rules prevented them from earning money from endorsement and sponsorship deals dating to 2016.

“Even thou⭕gh it was only because of the overwhelming legal pressure, the NCAA, conferences and schools are agreeing that college athletes should be paid,” said Ramogi Huma, a former UCLA football player and lo꧒ngtime advocate for college athletes. “And there’s no going back from there.

“That’s truly groundbreaking.”

Some of the money will com♊e from NCAA reserve funds and insurance but even though the lawsuit specifically targeted five conferences that are comprised of 69 schools (including Notre Dame), dozens of other NCAA member schools will see smaller distributions from the NCAA to cover the mammoth payout.

Schools in the Big Ten, Big 12, Atlantic Coast and Southeastern conferences will end up bearing the brunt of the settlement at a cost of about $300 m🦩illion each over 10 years, the majority of which will be paid to athletes going forward.

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The Pac-12 is also part of the settlement,ꦍ with all 12 sharing responsibility even though Washington State and Oregon State will be the onꦑly league members left by this fall after the other 10 schools leave.

Paying athletes

In the new com♉pensation model, each school will be permitted but not required to set aꦚside up to $21 million in revenue to share with athletes per year, though as revenues rise so could the cap.

Athletes in al💮l sports would be eligible for payments and schools would be given the freedom to decid𒉰e how that money is divvied up among sports programs.

Scholarship limits by sport will be replaced b♚y roster restrictions.

Whether the new compensation model is subject to the Title IX gender equity law is unknown along with whether schools will be able to bring NIL activities ♕in-house as they hope and squeeze out the b🍒ooster-run collectives that have sprouted up in the last few years to pay athletes.

Both topics could lead to more lawsuits.

The case

The cﷺlass-action federal lawsuit at the cente🎃r of the settlement, House v. the NCAA, was set to go to trial in January.

The complaint, brought by former Arizona 🍸State swimmer Grant House and Sedona Prince, a former Oregon and current TCU basketball player, said the NCAA, along with the five wealthiest conferences, improperly barred athletes from earning endorsement money.

The suit also made the case that athletes were entitled to a piece of the billions of dollars the NCAA and those conferences eꩵarn from media rights agreements with television networks.

Amid political and public pressure, and facing the prospect of another court loss that some in college sports claimed could reach $20 billion in damages, NCAA and conference officials conceded on what has long been a core principal of the enterprise: That schools don’t directly pay the athletes to play beyond a scholarship.

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That principle had already been den🎃ted numerous times over the last decade.

Notably, the Supreme Court unanimously ruled against the NCAA in 20ಌ21 in a case related to education-related benefits.

The narrow focus of the Alston case didn’t collapse the collegiate sports system, but the strong rebuke of the NCAA’s model of amateurism flung the door open to more lawsuits.

Justice Brett Kavanaugh, a former Yale athlete, put it bluntly: “The bottom line is that the NCAA and its member colleges are suppressing the pay of student athletes who collectively generate billions of dollars in revenues for colleges every year.”

The other cases

The settlement is expected to cover two other antitrust cases facing the NCAA and maj💫or conferences that challenge athlete compensation rules. Hubbard vs. the NCAA and Carter vs. the NCAA are also currently in front of judges in the Northern District of California.

A fourth case, Fontenot vs, NCAA, creates a potential compl🐬ication as it remains in a Colorado court after a judge denied a request to com💛bine it with Carter.

Whether Fontenot becomes part of the settlement is unknown and it matters because the NCAA and its conferences don’t want to be on the hook for more damages should they lose in court.

“We’re going to continue to litigate our case in Colorado and look forward to hearing about the terms of a settlement proposal once they’re actually released and put in front of a court,” said George Zelcs, a plaintiffs’ attorney in Fontenot.

College athletics overhaul

The solꦫu𒆙tion agreed to in the settlement is landmark, but not surprising.

College sports has been 🍸trending in this direction for years, with athletes receiving more and more monetary benefits and rights they say were long overdue.

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In December, NCAA President Charlie Baker, the former Mas🌟sachusetts governor who has been on the job for 14 months, proposed creating a new tier of Division I athletics where the schools with the most resources would be required to pay at least half their athletes $30,000 per year.

That suggestion, along wit𝓡h𝐆 many other possibilities, remain under discussion.

The set⛄tlement does not make every issue 💎facing college sports go away.

There is still a ques♌tion of whether athletes should be deemed employees of their schools, something Baker and other college sports leaders 

Some type of federal legislation or antitrust exemption is likely still needed to codify the terms of the settlement, protect the NCAA from future litigation and pre-empt state laws that attempt to neuter the organization’s authority.

As it is,  t🌼hat challenge its ability to 𓂃govern itself, including setting rules limiting multiple-time transfers.

Federal lawmakers have indicated they would like to get something d✃one, but whi﷽le several bills have been introduced none have gone anywhere.

Despite the unanswered questio🥃ns, one thing is clear: Major college athletics is about to become more like profeꦦssional sports than ever before.